The dollar strengthened against its peers today on thin volume as the market looked towards the Federal Reserve’s next policy meeting and as the greenback regained ground following last week’s sudden losses.  US inflation data from Friday continued to support the dollar as investors look for new signs in the Fed’s latest minutes release for when a rate increase will take place this year.  The dollar had post losses following data released on Friday which revealed that US industrial production dropped for the 5th month in a row and that US consumer sentiment declined to its lowest level in 7 months in April.

The euro weakened against the dollar coming off its 3 month high of 1.1467 set on Friday as new fears regarding the possibility of a Greek default became apparent.  Greece is still desperately trying to have its creditor agree to its proposed reforms in order to secure bailout funds.  It was reported over the weekend that the International Monetary Fund can by no means see how Greece can satisfy a loan repayment by June 5 without using bailout funds.

The pound weakened against the dollar with the pair down around 0.5% trading at 1.5650 as the greenback steadied its recovery.  The pair was trading at its lowest level since May 13.  The pound was stronger against the euro.  

The yen weakened against the dollar with the pair trading in its usual tight range up roughly 0.5%.  Data released earlier in the session had put pressure on the yen.  Japan’s core machinery orders increased by 2.9% in March marking its first uptick in 2 months, however the data also highlighted a decline in core machinery orders to take place in the 2nd quarter which dampened outlook for economic recovery.  

The Australian, New Zealand and Canadian dollars weakened against the greenback.  The Aussie dollar dropped over 0.5% and the kiwi dollar tanked over 1%.  The Australian Bureau of Statistics released data which revealed that new motor vehicle sales dropped 1.5% in April following a 0.5% increase in March.  The loonie declined over 1% against the dollar as the greenback steadied its recovery.  The loonie had overlooked data released on Friday which revealed that Canadian manufacturing sales increased 2.9% in March well beyond forecasts for a rise of 1.2%.  

Disclaimer: This information has been prepared to provide you with general information only. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information.